Oil prices fall despite US-Iran war

Oil prices fell on July 31, 2026, but remained on track for a monthly rise of about 20%, as increased flows through the Strait of Hormuz offset ongoing Middle East tensions. Brent crude fell 1.2% to $88 per barrel, while WTI slipped 1.8% to $82.09. The Strait of Hormuz, carrying about a fifth of global crude and LNG shipments, has been largely blockaded since the February 28 launch of the US-Israel war on Iran. Saudi Arabia is seeking to lead a multinational maritime defence coalition to boost cooperation in the Bab El-Mandeb Strait, the Red Sea, and the Gulf of Aden, with 14 nations including Djibouti, Egypt, Pakistan, Sudan, and Turkey in support. Iran-aligned Houthi militants in Yemen declared a naval blockade on Saudi Arabia last week, threatening Red Sea oil exports. Despite continued tanker traffic, higher security risks have boosted freight costs and insurance premiums, embedding a significant geopolitical risk premium in oil prices. Analysts noted that while prices eased from recent highs, the broader trend remains constructive.